Metropolitan Holdings , which aims to create SA’s third- largest life assurer by merging with Momentum, has plans to earn at least 25% of its annual revenues from international operations within five years.
The group will even attempt to break into non-English-speaking countries as it prepares to take on the big players on the continent.
This year, however, the group would rather focus on consolidating its operations in
Ghana and , and also the merger with Momentum, one of the largest corporate deals to be concluded in SA so far this year. Nigeria
The embedded value of Momentum — a subsidiary of FirstRand — was estimated when the deal was announced last month at about R18bn for the transaction, while that of Metropolitan was R12bn. The embedded value in insurance terms measures the present value of future profit plus net asset value of a life assurance company.
Metropolitan CE Wilhelm van Zyl said international expansion would secure adequate growth opportunities rather than merely becoming another means of diversifying its source of profits, and would also provide a cushion against the competitive nature of the new business landscape.
Mr van Zyl could not be reached yesterday to comment on how the merger with Momentum would affect Metropolitan’s international expansion.
The group joins a clutch of South African companies venturing further into Africa, targeting potentially high-growth markets such as
, whose large population makes it an attractive proposition for the financial and telecommunications sectors. Nigeria
Standard Bank , Africa’s largest by assets, already has operations in
and is said to be eyeing further growth, while FNB and Nedbank are also known to be seeking out opportunities. Nigeria
Mr van Zyl said Metropolitan was committed to deriving up to 25% of its earnings from international operations in five years .
In the year to December, it reported diluted core headline earnings of R934m, compared with R1,01bn the previous year, according to a five-year review in the report.
“Plans to establish ourselves in new countries are on hold for 2010 while we consolidate operations in
Ghana and … but we are planning to expand into at least three more African states within the next five years. Nigeria
“In all likelihood, we will then also cross the self-imposed boundary of countries using English as their official means of business communication for the first time,” Mr van Zyl said.